New Home Building and Investment Property Tips and News

Okay, so you have written down your budget. Your savings plan is underway and you can see those dollars increasing every week in your account. Fantastic, you are on your way to achieving your goal.

In preparation for your first property purchase there are a few more things to prepare and keep in mind other than your deposit.

Remember to keep your savings in a separate account, not just the account your pay goes into. This gives the proposed lender a clear view of your savings patterns.

It is always good to save more than your targeted amount as when you do move into your house there are always additional costs and expenses. Stamp Duty on the purchase of a house can be quite substantial as well as Conveyancing and Borrowing costs. You may also want to do additional landscaping or buy additional furniture. Your Broker can give you a full run-down of all costs involved in the purchase process.

If you do want that new lounge, TV or Fridge, it is always recommended you steer away from interest free deals or credit cards at this early stage.

Take extra care with your current Telephone and mobile accounts, and, if you are living with mates, electricity accounts. If you have a bad history in either one of these, it can stop you from getting a loan. Be responsible for your spending and bills especially mobile phone accounts as mismanagement of this could result in a default on your credit rating which makes it very tough to get finance.

You might have a good savings history however if you are overdrawn on another account this could also jeopardise your borrowing ability. It is important to keep your everyday transaction account as well as your savings account looking good.

Car loans. If your are thinking of buying a house don’t go out and spend a lot of money on a car. Lets say a car repayment is $500 per month, your car loan decreases your borrowing capacity. If you are thinking of buying a house and car, do the house first.

A few simple things to keep in mind when preparing to purchase your first property. All of these points can be clarified and explained further by your broker.

This is a question I am often asked by First Home Owners and it is one that I am more than happy to answer time and time again.

In making your first purchase in property, whether it be your first home or first investment property, it does not need to be daunting. With a little preparation the journey can be fun and you may even find that you want to stay on the ride.

Let's get started - First Home Buyer

Step One Get an idea on how much you want to spend on your first home. In order to do this have a look at real estate websites like domain.com.au and realestate.com.au. This will give you a feel for what you might get for your dollar. For example, if you are after a 3 bedroom house with double garage in Charlestown, do your research on the above sites and see what this style of house is generally selling for.

Keep an open mind, you may have to go to an outer suburb if the prices are too high for what you want.Step Two Talk to your local broker for hints and tips on how to be in a position to borrow the money for that house.

Step Three Save, save and save some more. Work on a savings plan. Have a clear, written budget which includes all your spending. Your broker can assist or you can find budget templates online.

Look at what your current surplus income is and set aside as much as you can for your deposit.

In saving for a deposit you are doing two things, one - you are saving the actual deposit that you require and two – as a regular savings pattern you are proving to the bank that you will be able to afford the loan. So it makes sense that the amount you save should be equal to the amount the payment would be. If you are renting you save the difference of the rent to the repayment.

This could be a 6 to 12month plan depending on your financials. If Mum and dad want to give you some cash to help you with your first home, for the bank to consider this as your savings it would need to be in your account for ate least 3 months.

If you find that your surplus income is not enough to cover a loan repayment you may have to adjust your budget/living style or increase your income. Remember when you start your mortgage there will be a regular set repayment for fortnight or month. The bank want to be sure that you can make regular repayments which is why the savings plan is very important.

Please Note: The bank determines Genuine savings to be money is saved up over a 3 month period or funds held in your account for ate least 3 months. Please note it is possible to borrow 100% of the purchase price using equity in Mum and Dad's property however the bank still need to see that you have the ability to make the repayments.

Step Four

Once you get close to reaching your deposit amount it is time to approach your broker again to start the application process. Before you find a house you want, meet with your broker to make sure you fit the banks guidelines before you get your heart set on the property.

The best strategies are the ones that keep it simple. Following a few easy steps and being prepared can make your first property purchase an enjoyable one. Good luck with the house hunting!